Reliability of IGU supply is a business-critical factor for fabricators and installers. Could energy price increases make for another year of uncertainty?
Could the writing be on the wall? In 2021, 30 UK energy providers stopped trading, leaving more than two million domestic customers without a supplier.
What caused the collapse and why is it relevant to IGU supply? It comes back to hikes of up to 300% in wholesale energy prices, increases which not only energy companies but also their business customers have had to contend with.
That’s led to warnings from a wide range of manufacturing businesses, British Steel, among them. It said at the end of last year that energy prices were ‘spiralling out of control’, pushing up manufacturing costs by as much as 20%.
And the same goes for any manufacturing business which uses high energy use to convert raw materials into products, or in their general manufacture, including float glass companies and IGU manufacturers.
“IGU supply is going to be challenging this year for a different set of reasons,” says Jody Vincent, sales director, Emplas.
“Energy prices have the potential to have a very significant impact on what we pay for glass because of the increase in the cost of float glass manufacture and the toughening process.
“It could however, go further and push some IGU manufacturers out of business, reducing capacity in the market disrupting supply.”
He argues that the finances of some IGU manufacturers were already vulnerable following disruption to supply last year, working to limited allocations because of cold repairs. The increase in wholesale energy prices in effect, ‘kicking them while they’re down’.
This he warns could lead to consolidation in the months ahead, with implications for fabricators and installers.
“There had been massive movement in the IGU market pre-Covid with a series of high-profile acquisitions and mergers, already leading to a level of consolidation.
“Cold repairs allocations compounded that last year, putting smaller IGU manufacturers and their finances under increased strain.
“Energy price rises may be the tipping point, triggering wider consolidation as well as taking capacity out of the market – something which could leave installers exposed.”
This makes Emplas’ decision to take control of its IGU supply chain with the acquisition of Padiham Glass, in May 2018 inspired.
Against the backdrop of growing uncertainty in the IGU sector at the start of 2022, it delivers immediate benefits to Emplas and to those installers who buy from in glazed frames from it.
“We’ve been on allocation in the same way as everyone else has but our glass supply chain has been robust and what was promised by Saint Gobain was delivered,” Jody explains.
“We and our customers have also seen value in the growing commercial and retail recognition the Planitherm brand now has and which we believe will offer future opportunities to our customers going forward.
“The biggest benefit by far, however, is the control that our own IGU business gives us. It was invaluable during the past two years, and against the backdrop of consolidation in IGU supply this year, it has the potential to deliver an even greater benefit to our customers.”
Padiham gives Emplas direct access to the manufacture of more than 10,000 IGUs a week, from fire rated IGUs to standard products. It also supplies an extensive range of painted glass, while it has its own toughening, heat soaking and laminate cutting lines.
“The increased use of toughened and laminate glass in specification, is another benefit to our customers – whatever the spec we can meet it as a single source supplier,” Jody adds.
“Most importantly, it insulates us and our customers against any future consolidation in the IGU sector in the face of increased energy costs.
“If energy companies can fail, it would be foolish to assume that as a sector we were in any way immune. There is no Government safety net guaranteeing supply. If capacity goes, it’s going to be tough to find a new IGU supplier.
“That’s a headache we can take away.”
